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THE  MACHINERY 

OF 

FEDERAL  REGULATION 

OF 

COMMERCE 

THESIS 

PRESENTED  TO  THE  FACULTY  OF  THE  GRADUATE  SCHOOL  OF  THE 

UNIVERSITY  OF  PENNSYLVANIA  IN  PARTIAL  FULFILMENT 

OF  THE  REQUIREMENTS  FOR  THE  DEGREE  OF 

DOCTOR  OF  PHILOSOPHY 


BY 

DAVID  SCOTT  HANCHETT 


PHILADELPHIA 
1915 


THE  MACHINERY 

OF 

FEDERAL  REGULATION 

OF 

COMMERCE 

THESIS 

PRESENTED  TO  THE  FACULTY  OF  THE  GRADUATE  SCHOOL  OF  THE 

UNIVERSITY  OF  PENNSYLVANIA  IN  PARTIAL  FULFILMENT 

OF  THE  REQUIREMENTS  FOR  THE  DEGREE  OF 

DOCTOR  OF  PHILOSOPHY 


BY 

DAVID  SCOTT  HANCHETT 


PHILADELPHIA 
1915 


The  following  pages  are  reprinted  from 
Volume  II  of  "The  History  of  the  Domestic 
and  Foreign  Commerce  of  the  United  States," 
published  by  the  Carnegie  Institution  of 
Washington. 


PART  THREE 


GOVERNMENT  AID  AND  COM 
MERCIAL  POLICY 


BY  D.  S.  HANCHETT 


336270 


CHAPTER  XXXVII. 
THE  MACHINERY  OF  FEDERAL  REGULATION  OF  COMMERCE. 

Regulation  of  commerce  before  1789,  241.  The  commerce  clause  of  the  Constitu- 
tion, 242.  Powers  of  the  President  regarding  commerce,  243.  Commercial  func- 
tions of  Department  of  State,  244.  The  Department  of  War,  245.  Department 
of  the  Treasury,  246.  The  customs  service,  246.  Revenue  cutter  service,  248. 
Life-saving  service,  249.  Marine  Hospital,  249.  Bureau  of  Public  Health,  250. 
Quarantine  service,  250.  The  Post  Office  Department,  251.  Department  of  • 
Justice,  251.  Department  of  the  Navy,  252.  Hydrographic  Office,  252.  Depart- 
ment of  the  Interior,  253.  The  Department  of  Agriculture  and  the  Weather 
Bureau,  254.  Department  of  Commerce:  the  lighthouse  service,  255;  the  Bureau 
of  the  Census,  256;  the  Coast  and  Geodetic  Survey,  257;  the  Bureau  of  Foreign  and 
Domestic  Commerce,  258;  the  Bureau  of  Standards,  260;  Steamboat-Inspection 
Service,  261;  the  Bureau  of  Navigation,  262;  the  Bureau  of  Corporations,  263. 
Department  of  Labor,  263.  Independent  governmental  and  international  agencies, 
264.  The  judiciary  and  legislative  agencies,  265. 

From  the  earliest  days  of  its  history  the  United  States  Government 
has  been  active  in  the  control  and  regulation  of  commerce.  Before  the 
outbreak  of  the  Revolutionary  War  the  American  colonists  were  accus- 
tomed to  the  regulation  of  commercial  matters  by  the  British  Govern- 
ment, and  it  is  not  surprising  that,  when  independence  was  declared,  the 
Continental  Congress  should  have  proceeded  to  regulate  trade  matters. 
While  it  possessed  no  authority  to  do  so,  its  action  was  nevertheless 
respected  by  the  several  States  during  the  revolutionary  crisis.  As 
early  as  1775  the  Continental  Congress  opened  American  ports  to  the 
ships  of  all  countries,  prohibited  the  slave  trade,  and  assumed  the 
management  of  the  post-office.  The  first  treaty  of  commerce  (with 
France)  providing  for  reciprocal  trade  was  negotiated  along  with  the 
treaty  of  alliance  in  1778.  But  these  de  facto  powers  did  not  become 
de  jure  at  once.  The  colonists  had  not  entirely  learned  the  lesson  of 
cooperation.  The  Articles  of  Confederation,  adopted  by  Congress  in 
1777,  and  ratified  by  all  of  the  States  by  1781,  gave  Congress  no  power 
to  make  commercial  regulations. 

The  various  State  governments  not  only  placed  varying  restrictions 
upon  foreign  trade,  but  often  imposed  burdensome  duties  on  interstate 
traffic  as  well,  and  retaliation — commercial  war  in  fact — was  the  result. 
Effective  regulation  of  trade  under  the  Articles  of  Confederation  was 
impossible,  and  furthermore,  individual  States  obstinately  prevented 
the  adoption  of  several  amendments  to  the  Articles  which  were  then 
brought  forward  with  a  view  to  conferring  upon  Congress  a  certain 
degree  of  regulative  power. 

The  unfortunate  commercial  situation  was  the  chief  reason  for  the 
change  in  the  form  of  government  effected  by  the  adoption  of  the 
Federal  Constitution  in  1789.  Of  the  various  powers  conferred  by  that 
instrument  on  the  Federal  authorities  none  were  more  important  than 


6  History  of  Domestic  and  Foreign  Commerce. 

those  relating  to  the  control  of  domestic  and  foreign  trade,  and  to 
the  various  institutions  with  which  the  operations  of  commerce  are 
closely  related.  Among  all  the  influences  which  contributed  to  the 
economic  prosperity  of  the  Republic  during  the  early  years  of  its 
existence,  none  was  more  potent  than  the  system  of  commercial  regu- 
lation, the  adoption  of  which  was  made  possible  by  the  Constitution. 
A  The  commerce  clause,  Article  I,  section  8,  of  the  Constitution, 
provides  that  "the  Congress  shall  have  Power  .  .  .  to  regulate  Com- 
merce with  foreign  Nations,  and  among  the  several  States  and  with  the 
Indian  Tribes."  Additional  clauses  of  the  same  article  and  section 
grant  to  Congress  the  power  "to  lay  and  collect  taxes,  duties,  imposts 
and  excises,  to  pay  the  debts  and  provide  for  the  common  defense  and 
general  welfare  of  the  United  States;  but  all  duties,  imposts  and  excises 
shall  be  uniform  throughout  the  United  States;"  and  "to  make  all  laws 
which  shall  be  necessary  and  proper  for  carrying  into  execution  the 
foregoing  powers,  and  all  other  powers  vested  by  this  Constitution  in 
the  Government  of  the  United  States,  or  in  any  department,  or  officer 
thereof."  >^The  power  thus  conferred  has  from  time  to  time  been 
broadly  construed  by  the  Supreme  Court,  and  as  a  consequence  the 
activities  of  the  Federal  Government  in  the  regulation  of  foreign  and 
domestic  trade  have  constantly  increased. 

Commerce  has  so  many  phases  and  touches  so  many  sides  of  national 
life,  that  it  would  be  impossible  to  place  under  a  single  officer  or  even 
in^a  single  department  all  the  governmental  functions  relating  to  it. 
Each  of  the  three  great  branches  of  the  Federal  Government,  the 
executive,  the  legislative,  and  the  judicial,  has  a  part  in  the  regulation 
of  trade.  The  President  and  the  various  executive  departments  imme- 
diately under  him,  the  Federal  Congress,  with  its  permanent  and  special 
committees,  and  the  Federal  courts,  from  the  beginning,  had  com- 
mercial functions  to  perform,  and  with  the  rapid  increase  in  the  volume 
and  complexity  of  the  trade  of  the  nation  and  with  the  steady  growth 
of  Federal  control,  the  machinery  for  the  regulation  of  commerce  became 
more  elaborate  and  complex.  In  1903  it  was  found  advisable  by  Con- 
gress to  create  a  new  executive  department,  the  Department  of  Com- 
merce and  Labor,  under  the  jurisdiction  of  which  was  placed  a  large 
number  of  bureaus,  boards,  offices,  and  services  which  had  formerly 
been  attached  to  other  executive  departments.  In  1913  this  policy  of 
segregation  of  work  in  department  matters  relating  to  commerce  was 
further  carried  out  by  creating  a  Department  of  Labor  separate  from 
the  Department  of  Commerce.  It  must  not  be  supposed,  however, 
that  all  of  the  governmental  services  which  relate  to  this  field  have 
been  placed  under  the  Secretary  of  Commerce.  All  of  the  executive 
departments,  as  well  as  Congress  and  certain  Federal  courts,  exercise 
commercial  functions,  and  there  is  a  large  number  of  subordinate 
bureaus  and  offices  which  have  a  part  in  the  work  of  aiding  and  regu- 


The  Machinery  of  Federal  Regulation  of  Commerce.  7 

lating  the  interstate  and  foreign  trade  of  the  nation.  It  is  the  purpose 
of  this  chapter  to  give  briefly  the  history  of  the  administrative  regula- 
tion of  commerce  by  the  various  divisions  of  the  Federal  Governmental 
machinery.1 

POWERS  OF  THE  PRESIDENT  REGARDING  COMMERCE. 

At  the  head  of  the  executive  branch  of  the  government  stands  the 
President  of  the  United  States.  His  influence  upon  commerce  is 
exerted  in  numerous  ways,  his  appointing  power  being  first  in  impor- 
tance. Upon  the  character  of  the  men  whom  he  selects  for  such  offices 
as  Secretary  of  Commerce  or  Interstate  Commerce  Commissioner 
depends  in  large  measure  the  efficiency  of  governmental  control  of 
commerce.  While,  indeed,  appointments  are  made  "by  and  with  the 
advice  and  consent  of  the  Senate,"  in  practice  the  President  is  but  little 
restricted  by  the  Senate  in  naming  men  to  fill  cabinet  positions.  Fur- 
thermore, by  virtue  of  his  power  of  removal,  of  the  broad  powers  of 
direction  which  he  exercises  over  the  work  of  the  executive  depart- 
ments, and  by  means  of  his  ordinance  power,  the  President  exerts 
great  authority  over  the  machinery  of  regulation.  A  recent  example 
of  the  exercise  of  the  ordinance  power  will  serve  to  illustrate  its  impor- 
tance. On  November  13,  1912,  President  Taft  by  proclamation  estab- 
lished the  tolls  which  are  to  be  levied  on  ships  passing  through  the 
Panama  Canal,  and  on  November  21,  1913,  President  Wilson  fixed 
the  rules  for  determining  the  tonnage  upon  which  vessels  shall  pay  the 
tolls  that  are  levied,  thereby  affecting  the  commerce,  not  only  of  the 
United  States,  but  of  the  world,  to  the  extent  of  determining  the 
conditions  under  which  the  Panama  Canal  may  be  used. 

Another  and  very  specific  way  by  which  the  power  of  the  President 
is  exercised  over  commerce  is  through  his  special  authority  over  foreign 
relations.  The  Secretary  of  State  gives  to  diplomatic  relations  his 
special  attention,  but  upon  the  President  personally  depends  in  large 
measure  the  success  of  negotiations  with  other  powers  as  regards  com- 
mercial privileges,  and  the  rights  of  aliens  in  trade  with  and  in  the 
United  States.2 

While  the  treaty-making  power  is  exercised  by  the  President,  by  and 
with  the  advice  and  consent  of  the  Senate,  he  is  obliged  to  respect  the 
power  of  Congress  over  commerce,  and  must  observe  in  commercial 
treaties  the  policies  established  by  the  laws  of  Congress.  Conflicts 
have  arisen  with  respect  to  the  power  of  the  President  and  Congress 
in  relation  to  commercial  treaties,  but  the  Supreme  Court  has  declared3, 

JIt  will  be  noticed  that  much  of  the  language  used  in  this  part  of  this  volume  is  in  the  present 
tense.  In  giving  a  history  of  the  agencies  of  government  for  the  regulation  of  commerce  it  seems 
advisable,  and,  indeed,  almost  necessary,  to  state  what  the  commercial  functions  of  the  several 
departments  and  bureaus  now  are  and  to  state  when  and  how  those  powers  and  duties  concerning 
commerce  were  conferred  upon  the  existing  agencies  of  the  government.  "Present"  conditions 
are  those  of  1913. 

2Fairlie,  The  National  Administration  of  the  U.  S.,  of  America,  29, 

"United  States  vs.  Lee  Yen  Tai,  185  U.  S.  213. 


8  History  of  Domestic  and  Foreign  Commerce. 

that  "as  Congress  may  by  statute  abrogate,  so  far  at  least  as  this 
country  is  concerned,  a  treaty  previously  made  by  the  United  States 
with  another  nation,  so  the  United  States  may  by  treaty  supersede  a 
prior  act  of  Congress  on  the  same  subject."  The  act  or  treaty  which 
bears  the  most  recent  date  is  controlling,  and  the  President  may  there- 
fore, in  effect,  if  he  can  secure  the  consent  of  the  Senate,  supersede 
Congressional  action  by  the  negotiation  of  commercial  (or  other) 
treaties. 

The  President,  acting  through  the  State  Department,  prepares  the 
formal  draft  of  a  treaty  and  then  seeks  the  "advice  and  consent/' 
that  is  the  ratification,  of  the  Senate.  The  difficulty  of  securing  the 
approval  of  two-thirds  of  the  Senators  present  has  sometimes  required 
the  negotiation  of  a  new  treaty  or  the  acceptance  by  the  countries 
parties  to  the  treaty  of  amendments  proposed  by  the  Senate  as  condi- 
tions precedent  to  favorable  action.  The  Senate's  rejection  of,  or 
failure  to  accept,  a  treaty  has  given  rise  to  some  of  the  "executive 
agreements"  which  the  President  has  made  with  foreign  countries. 
President  Roosevelt's  agreement  with  Santo  Domingo  in  1905,  whereby 
the  supervision  of  Dominican  finances  was  undertaken  by  American 
citizens,  arrangements  were  made  for  paying  the  foreign  debt,  and 
American  battleships  were  sent  to  the  island,  followed  the  refusal  by 
the  Senate  to  ratify  a  treaty  the  chief  terms  of  which  were  those 
embodied  in  the  executive  agreement. 

The  use  by  the  President  of  his  military  powers  to  keep  open  the 
/  channels  of  interstate  commerce  during  strikes  and  riots  makes  him  the 
ultimate  authority  to  whom  appeal  must  be  'made  in  times  of  crisis  to 
keep  the  machinery  of  commerce  going.  The  President  is,  in  fact,  the 
supreme  director,  while  the  ten  great  administrative  departments,  at 
the  head  of  each  of  which  is  a  Cabinet  officer  of  his  selection,  comprise 
in  large  part  the  mechanism  through  which  he  acts. 

COMMERCIAL  FUNTIONS  OF  THE  DEPARTMENT  OF  STATE. 

Logically,  it  might  seem  better  to  consider  the  commercial  functions 
of  the  ten  departments  by  beginning  with  the  Department  of  Com- 
merce, to  which  is  now  intrusted  the  fulfillment  of  most  of  the  functions 
under  consideration.  In  order,  however,  to  show  more  effectively 
the  historical  growth  of  the  administrative  bodies  dealing  with  com- 
merce, the  departments  will  be  considered  chronologically.1 

The  Department  of  Foreign  Affairs  was  created  by  Congress  July 
27,  1789,  and  on  September  15  following  the  present  title  was  adopted. 
The  department  was  the  successor  of  the  Department  of  Foreign 
Affairs,  created  in  1781  to  handle  matters  which  had,  since  1775,  been 
delegated  to  committees  of  Congress.2  The  early  functions  of  the 

lHistory  of  the  Department  of  State  of  the  United  States,  1901,  14. 
^Checklist  of  United  States  Public  Documents,  1789-1909,  p.  891. 


The  Machinery  of  Federal  Regulation  of  Commerce.  9 

State  Department  were  more  comprehensive  than  they  are  now.  The 
Secretary  of  State  was  originally  at  the  head  of  the  Patent  Office,  and 
his  department  had  control  of  the  census,  and  although  both  of  these 
offices,  which  bear  important  relations  to  commerce,  have  been  trans- 
ferred to  other  departments,  the  State  Department  still  exercises  com- 
mercial functions  of  great  importance.  Foreign  relations,  the  super- 
vision of  which  was  the  primary  purpose  for  which  this  oldest  one  of  the 
executive  departments  was  organized,  have  always  been  handled  by  it 
through  the  diplomatic  serivce,  which,  in  1913,  included  157  officers 
who  represented  the  United  States  in  48  countries.  The  Secretary  of 
State  and  the  diplomatic  representatives  abroad  have  large  commercial 
responsibilities,  for  it  is  through  them  that  commercial  treaties  are 
negotiated  and  the  rights  existing  by  virtue  of  those  treaties  are  en- 
forced. The  general  functions  of  the  service  were  stated  as  follows 
by  Frederick  T.  Frelinghuysen,  Secretary  of  State  under  President 
Arthur: 

"The  diplomatic  officer  does  for  the  nation  what  the  consular  officer  does 
for  the  citizen.  Speaking  generally,  the  consul  aids  the  individual  and  pro- 
tects separate  interests,  while  the  minister  acts  for  the  nation  and  guards  its 
general  political  and  commercial  welfare."1 

With  the  details  of  commercial  affairs  the  diplomat  is  not  usually 
concerned,  but  one  of  his  chief  duties  is  to  cooperate  with  consular 
officers  in  promoting  American  commerce,  agriculture,  and  manufac- 
tures. The  consular  service  is  fully  considered  in  the  following  chapter. 
The  Bureau  of  Citizenship  supplements  the  work  of  the  foreign  service 
by  issuing  passports,  examining  certificates  of  the  registration  of 
American  citizens  in  consulates,  authenticating  documents  for  use 
abroad,  and  furnishing  to  citizens  letters  of  introduction  to  members  of 
the  foreign  service.  Lists  of  American  diplomatic  and  consular  officers 
are  furnished  to  interested  parties  by  the  Bureau  of  Appointments.2 

THE  DEPARTMENT  OF  WAR. 

The  second  of  the  executive  departments  was  established  August 
7,  1789,  eleven  days  after  the  creation  of  the  Department  of  Foreign 
Affairs.  Its  chief  commercial  function  is  the  improvement  of  rivers 
and  harbors,  and  the  magnitude  of  its  operations  in  this  work  will 
appear  in  the  consideration  of  that  subject  in  Chapter  XL. 

The  War  Department  and  the  Secretary  of  War,  acting  through  the 
Bureau  of  Insular  Affairs  and  the  Corps  of  Engineers,  have  important 
duties  in  the  outlying  territories  of  the  United  States.  The  Canal 
Zone  in  Panama  was  administered  by  the  Secretary  of  War,  through 
the  Isthmian  Canal  Commission,  from  1904  to  1914,  when  it  was  placed 


.  Doc.  No.  146,  48  Cong.,  1  sess.,  p.  1. 
^Congressional  Directory,  63  Cong.,  3  se-ss.,  292. 


io  History  of  Domestic  and  Foreign  Commerce. 

under  the  governor  of  the  Panama  Canal,  who  is  subordinate  to  the 
Secretary  of  War.  To  the  Bureau  of  Insular  Affairs,  established  in 
1898  as  a  "division"  and  made  a  bureau  in  1902,  under  the  immediate 
control  of  the  Secretary,  is  assigned  all  matters  pertaining  to  insular 
civil  government.  Among  the  commercial  functions  of  the  bureau 
is  the  gathering  and  publication  quarterly  of  statistics  of  insular  exports 
and  imports,  shipping,  and  immigration.  Porto  Rico  was  granted  civil 
government  by  the  act  of  April  12,  1900,  and  until  June  30,  1908,  its 
governor,  who  is  appointed  by  the  President  of  the  United  States, 
was  required  to  report  to  the  State  Department.  Thereafter  juris- 
diction was  vested  in  the  War  Department.  Various  measures  of 
commercial  assistance,  including  the  improvement  of  San  Juan  harbor, 
have  been  prosecuted  by  the  United  States.  Civil  government  was 
established  in  the  Philippines  by  the  act  of  July  i,  1902,  and  the  islands 
are  governed  by  a  commission  which  was  organized  in  1904  and  is 
subject  to  the  Secretary  of  War. 

THE  DEPARTMENT  OF  THE  TREASURY. 

The  Treasury  Department  is  vitally  concerned  with  commerce,  which 
it  aids  and  regulates  through  five  different  agencies — the  Customs 
Service,  the  Revenue  Cutter  Service,  the  Commissioner  of  Internal 
Revenue,  the  Life-Saving  Service,  and  the  Bureau  of  Public  Health. 

In  the  constitutional  convention,  upon  the  initiative  of  Gouverneur 
Morris,  an  effort  was  made  to  designate  the  chief  officer  of  the  depart- 
ment as  the  "Secretary  of  Commerce  and  Finance."1  Although  this 
was  not  the  title  adopted,  the  Treasury  Department  nevertheless  had, 
from  the  beginning, .a  very  considerable  supervision  over  commerce,  and 
before  the  establishment  of  the  Department  of  Commerce  and  Labor, 
in  1903,  it  was  the  most  intimately  concerned  with  commerce  of  all  of 
the  executive  departments.  Its  former  primacy  in  this  respect  is 
apparent  when  it  is  remembered  that,  in  addition  to  the  services  which 
it  still  performs,  the  department  in  1903  also  included  the  Lighthouse 
Board,  the  Coast  and  Geodetic  Survey,  the  Steamboat-Inspection 
Service,  the  Bureau  of  Navigation,  the  Bureau  of  Immigration,  the 
Bureau  of  Statistics,  and  the  Bureau  of  Standards.  All  of  these 
bureaus  and  services  were  then  transferred  to  the  new  Department  of 
Commerce  and  Labor,  but  the  Treasury  Department  nevertheless 
retained  many  important  duties  respecting  the  regulation  of  commerce. 

Important  commercial  functions  are  exercised  by  the  Customs 
Service,  which,  as  one  of  the  first  necessities  of  government,  was  estab- 
lished by  the  act  of  September  2,  1789,  in  the  Treasury  Department, 
where  it  has  remained.  From  1849  to  1894  there  was  a  Commissioner 
of  Customs,  whose  functions  were  rather  those  of  an  auditor  than  of 
an  administrative  officer,  and  whose  office  was  discontinued  when 

^Organization  and  Law  of  the  Department  of  Commerce  and  Labor,  8. 


The  Machinery  of  Federal  Regulation  of  Commerce.          1 1 

the  auditing  service  was  reorganized.  The  general  supervision  of 
the  service  and  of  the  Division  of  Customs,  which  was  organized  about 
1870  to  attend  to  administrative  duties,  is  vested  in  the  Assistant 
Secretary  of  the  Treasury  in  charge  of  customs.  An  organization  grew 
up  which,  in  course  of  time,  embraced  a  superabundance  of  offices  and 
officers  whose  salaries  were  not  adjusted  to  the  demands  made  upon 
them.  Finally,  pursuant  to  the  act  of  August  24,  1912,  a  reorganiza- 
tion was  effected,  designed  to  accommodate  the  machinery  of  collection 
to  altered  trade  conditions.  The  126  collection  districts  previously 
in  existence  were  reduced  in  number  to  49,  and  the  designations  "sub- 
port  of  entry"  and  "port  of  delivery"  were  abolished,  "port  of  entry" 
being  the  only  classification  retained.  A  collector  of  customs  has 
general  supervision  of  each  district,  and  a  collector  of  the  port  has 
charge  of  each  port. 

The  functions  of  the  service  pertain  to  the  entry  of  ships  from 
foreign  ports,  the  levying  of  customs  duties  following  an  appraisal  of 
imported  goods,  the  hearing  of  appeals  respecting  appraisals,  the 
departure  of  ships  from  port,  and  the  enforcement  of  various  navigation 
laws.  Permission  to  discharge  cargo  is  given  to  the  master  only  after 
a  sworn  copy  of  the  ship's  manifest  has  been  filed  with  the  port  col- 
lector, together  with  the  clearance  papers  and  register  or  a  consul's 
receipt  therefor.  The  tonnage  tax,  levied  on  all  ships  arriving  from 
foreign  ports,  is  then  collected.  A  customs  officer  supervises  the 
process  of  unloading.  Consignees  enter  goods  at  the  custom-house 
by  presenting  sworn  invoices  from  the  consignor  or  owner,  and  the 
goods  are,  moreover,  appraised  by  examiners,  appraisers,  and  assistant 
appraisers,  and  at  the  smaller  ports  by  collectors  themselves.  In 
practice  most  of  the  work  is  done  by  individual  examiners,  upon  whose 
knowledge  and  judgment  depends  the  accuracy  of  the  appraisal,  inas- 
much as  the  appraisers  themselves  are  unable,  at  the  more  important 
ports,  to  review  effectively  the  work  of  their  subordinates. 

Although  admittedly  inadequate,  this  appraisal  assists  in  the  detec- 
tion of  frauds.  Appeal  from  it  lies  to  the  Board  of  General  Appraisers, 
appointed  by  the  President,  which  was  a  branch  of  the  Treasury 
Department  until  1909,  since  when  it  has  been  quasi-independent. 
The  headquarters  of  the  board  are  in  New  York,  where  two-thirds  of  the 
work  is  done.  It  serves  as  a  reviewing  board,  with  some  functions 
analogous  to  those  of  a  court.  Appeal  from  its  decisions  lies  to  the 
United  States  Court  of  Customs  Appeals. 

When  the  appraisal  has  been  completed,  the  customs  duties  are 
levied.  Since  the  institution  in  1846  of  bonded  warehouses,  it  has  no 
longer  been  necessary  to  collect  duties  or  to  insure  their  collection  before 
goods  are  landed,  but  the  importer  may,  if  he  chooses,  store  the  goods 
in  a  Government  warehouse  or  in  a  private  warehouse  supervised  by 
customs  officers.  After  the  outgoing  cargo  has  been  loaded  and  the 


12  History  of  Domestic  and  Foreign  Commerce. 

ship  is  ready  to  depart,  its  register  is  obtained,  and  a  bill  of  health, 
certifying  to  the  health  conditions  of  the  port,  together  with  clearance 
papers,  are  secured  from  the  collector.  A  ship  from  abroad  is  thus  kept 
under  the  supervision  of  the  customs  service  during  the  entire  length  of 
its  stay  in  port.  From  the  records  of  arrivals  and  clearances,  and  from 
the  copies  of  ships'  manifests  filed  with  him,  the  collector  compiles 
foreign  trade  and  tonnage  statistics  which  are  published  by  a  bureau 
in  the  Department  of  Commerce. 

Customs  officers  also  document  ships  flying  the  American  flag; 
keep  records  of  crew  lists  of  departing  ships;  receive  passenger  lists 
of  arriving  ships;  record  bills  of  sale  and  mortgages  of  vessels;  enforce 
the  steamboat-inspection  laws;  and,  where  there  is  no  shipping  com- 
missioner, carry  out  his  duties  with  respect  to  the  shipping  of  seamen. 

In  the  collection  of  import  duties  the  Customs  Service  is  assisted  by 
the  Secret  Service  and  the  Revenue  Cutter  Service,  which  are  likewise 
organized  under  the  Treasury  Department.  The  Secret  Service, 
which  was  established  in  1861,  in  the  State  Department,  was  trans- 
ferred in  1865  to  the  Treasury  Department,  of  which  it  has  since  been 
a  division.  Its  work  was  formerly  confined  chiefly  to  the  prevention 
of  counterfeiting,  but  in  1911-12  its  duties  were  increased,  and  it  now 
cooperates  with  the  Division  of  Special  Agents  maintained  by  the 
Treasury  Department  for  the  purpose  of  detecting  customs  frauds. 

The  Revenue  Cutter  Service,  established  in  1790,  was  known  as  the 
Revenue  Marine  Service  until  1894.  It  is  organized  as  a  division  in 
the  Treasury  Department,  and  does  for  the  Customs  Service  on  the  sea 
what  the  Secret  Service  does  for  it  on  land.  The  officers  of  its  revenue- 
cutters  board  inbound  vessels  from  foreign  ports,  examine  their  papers, 
and  indorse  the  manifests  covering  their  cargoes.  Besides  aiding  gener- 
ally in  the  enforcement  of  the  revenue  laws,  the  service  exercises  many 
other  functions.  It  cooperates  with  the  Department  of  Commerce  in 
enforcing  the  navigation  and  motor-boat  laws,  requires  strict  obser- 
vance of  the  laws  governing  the  anchorage  and  movement  of  vessels  in 
port,  enforces  the  quarantine  and  immigration  laws,  and  suppresses 
mutiny  aboard  merchant  vessels.  The  major  part  of  the  actual  work 
of  the  service  is  of  an  emergency  nature.  It  is  called  upon  to  assist 
vessels  in  distress,  to  remove  derelicts  from  the  ocean,  and  to  save  lives 
at  sea.  Its  officers  aid  the  life-saving  corps  by  instructing,  drilling, 
and  inspecting  crews  and  constructing  stations.  The  wireless  equip- 
ment of  the  revenue-cutters  enables  them  to  assist  in  the  protection  of 
life  and  property  at  sea. 

Existing  arrangements  for  the  collection  of  internal  revenue  date 
from  1862,  when  the  Civil  War  necessitated  the  reestablishment  of 
taxes  of  this  nature,  which  had  not  been  collected  at  all  since  1848. 
The  Commissioner  of  Internal  Revenue,  who  is  at  the  head  of  the 
bureau  of  the  same  designation,  superintends  the  enforcement  of  the 


The  Machinery  of  Federal  Regulation  of  Commerce.          13 

internal-revenue  laws  and  the  collection  of  the  taxes.  Inasmuch  as  the 
collection  of  these  taxes  ordinarily  requires  very  little  work,  the  chief 
duties  of  the  internal-revenue  forces  are  those  of  inspection.  Until 
1909  the  activities  of  the  bureau  were  confined  to  taxes  levied  on  certain 
specified  documents  and  articles  of  commerce.  The  special  excise  tax 
on  corporations,  authorized  by  Congress  in  that  year,  extended  the 
field  of  operations  materially,  and  the  duties  of  the  bureau  were  further 
increased  and  its  collections  vastly  augmented  in  1913,  when  the  collec- 
tion of  the  income  tax,  authorized  by  amendment  of  the  Constitution, 
was  made  a  duty  of  the  bureau. 

Life-saving  stations  were  first  established  by  the  Federal  Government 
in  1874,  under  the  direction  of  the  Revenue  Marine  Service,  which  had, 
however,  previously  been  carrying  on  for  a  long  time  the  work  of  life- 
saving  at  sea.  In  1878,  the  Life-Saving  Service  was  separately 
organized  as  a  division  in  the  Treasury  Department,  where  it  still 
remains,  under  the  supervision  of  a  general  superintendent.  The 
keepers  and  surfmen  at  the  284  stations  maintained  by  the  service  keep 
a  strict  watch,  patrol  the  coasts  at  night,  warn  ships  of  impending 
danger,  rescue  lives,  and  save  property  threatened  with  loss  at  sea. 
Valuable  statistical  reports  are  compiled  showing  marine  casualties, 
not  only  within  the  field  of  operations  of  the  service,  but  throughout 
the  entire  world.  Miscellaneous  minor  services,  such  as  the  recovery 
of  missing  buoys  and  the  relighting  of  extinguished  beacons,  are 
rendered. 

Great  modifications  in  the  equipment  of  the  service  have  made  its 
work  more  effective.  In  1912  there  were  in  use  109  power  life-boats 
and  surf-boats,  which  not  only  increased  the  efficiency  but  extended  the 
scope  of  the  service.  More  disasters  were  brought  within  reach  and 
many  more  rescues  were  reported  than  in  the  years  prior  to  1908,  when 
power-boats  were  little  used.  The  service  operates  nearly  1,500  miles 
of  telephone  lines,  connecting  with  public  telephones  and  wireless 
stations,  so  that  it  keeps  in  close  touch  with  the  Weather  Bureau  and 
with  commercial  centers.  Facilities  are  thus  provided  for  displaying 
promptly  storm-warning  signals  and  for  furnishing  to  ship-owners  and 
others  information  concerning  vessels  endangered  by  storms  along  the 
coast.  In  the  1,730  disasters  reported  to  have  occurred  within  the 
limits  of  operations  in  1912,  only  59  vessels  were  lost.  The  property 
saved,  including  vessels  and  cargoes,  was  valued  at  $11,155,170. 

National  supervision  of  health  matters  is  exercised  through  the 
Treasury  Department,  under  the  control  of  which  the  Marine  Hospital 
of  the  United  States  was  established  in  1798.  The  purpose  then 
aimed  to  be  subserved  was  merely  the  provision  of  medical  attention 
for  sick  and  disabled  seamen  in  the  merchant  marine.  However,  con- 
siderations of  expediency  caused  a  constantly  growing  emphasis  to  be 
placed  on  matters  relating  to  the  public  health,  and  many  new  functions 


14  History  of  Domestic  and  Foreign  Commerce. 

were  from  time  to  time  intrusted  to  the  service.  In  1902  the  designa- 
tion "Public  Health  and  Marine  Hospital  Service"  was  adopted,  and 
finally,  in  1912,  the  designation  "  Bureau  of  Public  Health"  was  applied 
and  an  organization  effected  designed  to  deal  with  the  health  of  the 
nation  in  its  broadest  sense.  The  past  and  present  services  rendered  by 
this  branch  of  the  department  are  best  treated  by  a  consideration  of 
the  work  of  its  various  divisions. 

The  Division  of  Marine  Hospitals  and  Relief  maintains  146  establish- 
ments, where  medical  care  is  given  to  the  officers  and  crews  of  American 
vessels,  as  well  as  to  government  employes  in  various  marine  services, 
and  conducts  examinations  for  the  detection  of  color-blindness  in  ship's 
officers.  The  work  of  this  division  embodies  the  earliest  functions  of 
the  service. 

Through  the  Division  of  Foreign  and  Insular  Quarantine  and  Immi- 
gration, a  service  of  ever-increasing  importance  is  rendered.  Although 
quarantine  matters  were  originally  left  to  the  States,  as  early  as  1796 
and  1799  Federal  legislation  directed  certain  officials,  such  as  port 
collectors  and  revenue-cutter  officers,  to  assist  in  the  execution  of  State 
legislation.  The  cooperation  of  the  consular  service  was  secured  at  an 
early  date  through  reports  on  the  existence  of  disease  abroad  and  on 
the  sailing  of  vessels  bound  from  infected  ports  to  the  United  States. 

Federal  interest  in  quarantine  matters  was,  however,  slight  until  in  the 
late  seventies,  when  a  serious  yellow-fever  epidemic  in  the  South  led 
to  an  agitation  for  a  national  quarantine  system.  In  1878  the  Secre- 
tary of  the  Treasury  was  authorized  to  establish  a  quarantine  at  ports 
where  no  State  or  municipal  establishments  existed.  The  following 
year  a  National  Board  of  Health  was  established  with  authority  to 
promulgate  national  "quarantine  regulations,  which,  if  State  authorities 
were  unwilling  to  enforce,  were  to  be  carried  out  by  Federal  officers 
specially  designated  for  the  purpose.  Another  crisis  came  in  1893, 
when  an  epidemic  of  Asiatic  cholera  in  European  ports,  whence  emi- 
grants sailed  to  the  United  States,  led  to  the  establishment  of  a  more 
effective  supervision.  The  National  Board  of  Health  was  abolished, 
and  control  over  quarantine  vested  in  the  Marine  Hospital  Service,  and 
the  strict  supervision  of  the  surgeon-general  has  since  brought  about 
the  conformity  of  the  State  regulations  with  Federal  regulations. 
Annual  conferences  of  State  and  National  health  officials  assist  in 
securing  uniformity  of  administration.  In  1879  the  National  Board  of 
Health  was  authorized  to  build  temporary  quarantine  stations,  which 
were  made  permanent  in  1888.  New  stations  have  been  authorized 
from  time  to  time,  until  the  service  now  maintains  a  total  of  47  in  the 
continental  United  States  and  24  in  outlying  possessions. 

Medical  officers  are  stationed  at  fourteen  American  consulates  to 
prevent  the  introduction  into  the  United  States  of  epidemic  diseases. 
The  Division  of  Foreign  and  Insular  Quarantine  and  Immigration  has 


The  Machinery  of  Federal  Regulation  of  Commerce.          15 

charge  of  the  examination  of  arriving  aliens,  and,  at  the  request  of  the 
Department  of  Labor,  which  supervises  immigration,  may  require 
quarantine  officers  stationed  at  Italian  consulates  to  inspect  emigrants 
departing  for  the  United  States.  Large  immigrant  hospitals  are  main- 
tained at  New  York  and  San  Francisco. 

Interstate  commerce  is  subject  to  the  rules  of  the  Division  of  Domes- 
tic (interstate)  Quarantine,  which  is  charged  with  preventing  the  spread 
of  contagious  or  infectious  diseases  from  one  State  or  Territory  into 
another. 

THE  POST-OFFICE  DEPARTMENT. 

When  temporarily  established  in  1789,  the  post-office  was  considered 
a  part  of  the  Treasury  Department,  but  in  1792  it  was  permanently 
established  as  the  General  Post  Office.  Although  in  1829  the  Post- 
master-General was  admitted  to  the  Cabinet,  it  was  not  until  1872  that 
the  post-office  was  recognized  by  Congress  as  an  executive  department. 
Aside  from  its  indispensable  function  of  supplying  a  prompt  and  safe 
mail  service,  it  has  secured  for  commerce  greater  security  with  respect 
to  means  of  transporation  than  would  otherwise  have  been  enjoyed, 
through  the  insistence  on  the  prompt  movement  of  trains  following  the 
designation  by  Congress,  in  1838,  of  every  railroad  in  the  United  States 
as  a  post-route.  Through  the  establishment  of  mail  subsidies,  which 
are  discussed  in  Chapter  XXXIX,  improvements  in  ocean  transporta- 
tion services  have  been  effected.  Moreover,  by  itself  becoming  a 
carrier  of  parcels,  first  in  1890  through  the  international,  and,  in  1913, 
through  the  domestic  parcel  post,  the  Post  Office  Department  has 
facilitated  the  movement  of  commerce.  Experiments  in  rural  free 
delivery,  begun  under  the  law  of  1890,  resulted  in  a  rapid  extension  of 
this  service  after  1897.  The  postal  savings  system,  established  in 
1911,  had,  within  one  and  a  half  years,  deposits  amounting  approxi- 
mately to  $28,000,000,  which,  in  the  opinion  of  the  Postmaster  General, 
represented  "hoarded  money  that  is  restored  to  the  channels  of  trade." 
Post-office  money-orders  and  the  registered-mail  service  are  both  great 
commercial  conveniences. 

THE  DEPARTMENT  OF  JUSTICE. 

Although  the  Attorney  General's  office  was  established  September 
24,  1789,  and  the  Attorney  General  was  from  the  outset  admitted  to  the 
Cabinet,  the  Department  of  Justice  was  not  recognized  as  an  executive 
department  until  1870.  Engaged,  as  the  department  is,  in  aiding  the 
executive  and  judicial  departments  of  the  Federal  Government  in  the 
enforcement  of  law,  its  duties  have  always  extended  to  all  the  concerns 
of  national  life.  Certain  of  the  Department  officers  are  specifically 
concerned  with  commercial  matters.  The  solicitor  for  the  Department 
of  Commerce,  for  instance,  acts  as  legal  adviser  to  the  Secretary  of 


1 6  History  of  Domestic  and  Foreign  Commerce. 

Commerce  and  the  bureau  chiefs;  the  Assistant  Attorney  General, 
Customs  Division,  represents  the  Government  in  all  cases  involving 
reappraisement  and  classification  of  imported  goods;  the  Solicitor 
of  Internal  Revenue  is  the  legal  adviser  of  the  Commissioner  of  Internal 
Revenue,  and  an  Assistant  to  the  Attorney  General  has  special  charge 
of  all  questions  arising  under  the  anti-trust  and  interstate-commerce 
laws. 

THE  DEPARTMENT  OF  THE  NAVY. 

Naval  affairs  were  first  administered  under  the  jurisdiction  of  the 
War  Department,  but  on  April  30,  1798,  a  separate  department  was 
created.  A  brief  account  of  the  growth  of  the  Navy  is  given  in 
Chapter  XXXIX.  Both  in  time  of  war  and  of  peace  the  Navy  and 
the  Marine  Corps  are  constantly  called  upon  to  protect  American 
interests  in  one  part  of  the  world  or  another.  The  account  of  the 
movements  of  individual  warships,  contained  in  the  Secretary's  annual 
reports,  indicates  the  wide  scope  and  great  utility  of  this  service.1 
Moreover,  by  placing  with  American  ship-builders  orders  for  war 
vessels,  the  department  requires  the  installation  of  improved  equipment 
at  the  shipyards  and  facilitates  the  development  of  skilled  workmen, 
whereby  American  establishments  are  placed  more  nearly  upon  a  com- 
petitive basis  in  the  construction  of  ships  of  all  kinds. 

The  Bureau  of  Navigation  of  the  Navy  Department  has  charge  of  the 
naval  wireless  equipment,  which  in  1912  included  41  shore  and  6  light- 
vessel  stations.  Several  naval  and  military  stations  were  in  that  year 
opened  for  the  transmission  and  receipt  of  commercial  radiograms,  and 
others  were  made  available  in  the  case  of  a  lack  of  private  facilities. 

The  Hydrographic  Office,  which  was  originally  established  in  1842 
as  an  independent  bureau  in  conjunction  with  the  United  States  Naval 
Observatory,  has  been  a  part  of  the  Bureau  of  Navigation  since  1866. 
It  is  charged  with  improving  the  means  of  safe  navigation,  both  for 
vessels  of  the  Navy  and  of  the  merchant  marine,  by  providing  accurate 
nautical  charts,  sailing  directions,  and  manuals  of  instruction.  Much 
of  the  information  contained  in  its  periodical  publications  is  of  such 
importance  to  mariners  that  it  is  "sent  broadcast  by  radio,"  so  that  all 
vessels  within  reach  may  get  it  at  once.  Monthly  charts  and  weekly 
bulletins  covering  the  North  Atlantic,  monthly  charts  of  the  North 
Pacific,  and  less  frequent  charts  of  other  oceans  are  published.  These 
charts  locate  both  fixed  and  temporary  dangers  to  navigation,  indicate 
the  usual  paths  followed  by  storms  at  particular  periods,  the  relative 
amounts  of  fog  which  may  be  met,  the  direction  and  force  of  prevailing 
winds,  the  direction  of  ocean  currents,  the  variation  of  the  magnetic 
needle,  and  the  courses  to  be  followed  in  crossing  the  ocean.  These 
"steamship  lanes"  were  originally  suggested  by  Lieutenant  M.  1" . 

1 .1  inutal  Report  Navy  Department,  1910,  pp.  57-118. 


The  Machinery  of  Federal  Regulation  of  Commerce.          17 

Maury,  of  the  United  States  Navy,  for  routes  between  northern  Europe 
and  the  United  States,  but  until  1891  there  was  no  agreement  to  follow 
them.  In  that  year  five  companies,  and  in  1898  all  companies,  con- 
cerned in  trans-Atlantic  service  agreed  to  do  so.  The  office  has  also 
played  an  important  part  in  inducing  the  steamship  lines  to  change  their 
courses  during  ice  seasons  in  order  to  avoid  danger.  Ice  reports  are 
sent  out  over  the  ocean  by  wireless,  and  in  1912,  following  the  Titanic 
diaster,  a  cruiser  was  detailed  for  ice-patrol  duty  in  the  North  Atlantic. 
The  Secretary  of  the  Navy  found  it  impracticable  to  detail  a  vessel  for 
this  work  in  1913,  but  the  Secretary  of  the  Treasury  placed  two 
revenue  cutters  in  this  service. 

The  Naval  Observatory,  which  grew  out  of  the  Department  of  Charts 
and  Instruments,  established  in  1830,  is  separately  organized,  although 
its  connection  with  the  Hydrographic  Office  is  so  close  that  their 
consolidation  has  been  urged.  The  Observatory  publishes  the  Ameri- 
can Ephemeris  and  Nautical  Almanac,  containing  astronomical  informa- 
tion for  the  guidance  of  vessels;  determines  the  relative  merits  of  navi- 
gation instruments,  and  establishes  standard  time  and  differences  of 
longitude. 

THE  DEPARTMENT  OF  THE  INTERIOR. 

The  Department  of  the  Interior,  which  was  created  in  1849  to  relieve 
other  executive  branches  of  the  administration  of  burdensome  affairs 
not  closely  related  to  their  normal  functions,  and  to  provide  means  for 
the  exercise  of  those  neglected  functions  which  relate  more  particularly 
to  the  arts  of  peace,  has  little  direct  connection  with  commerce.  The 
inconsequential  commerce  with  the  Indians,  which  under  the  Constitu- 
tion is  to  be  regulated  by  the  Federal  Government,  is  supervised  by  the 
Indian  Service.  With  the  development  of  the  railway  service  the 
department  has  been  concerned,  through  the  Commissioner  of  the 
General  Land  Office,  who  determines  whether  railroads  have  complied 
with  the  requirements  of  Congressional  grants.  From  1878  to  1904, 
an  officer,  first  known  as  Auditor  of  Railroad  Accounts,  and  later  as 
Commissioner  of  Railroads,  reported  on  the  physical  and  financial 
conditions  of  companies  receiving  Government  aid  in  lands  or  bonds, 
enforced  the  laws  relating  to  such  companies,  examined  their  books, 
aided  the  Government  directors  appointed  to  their  boards,  and  fur- 
nished information  concerning  their  tariffs  and  accounts.  His  duties 
were  transferred,  in  1904,  to  the  Lands  and  Railroads  Division,  and  in 
1907  to  the  General  Land  Office.  The  Interstate  Commerce  Commis- 
sion was,  for  two  years  following  its  creation  in  1887,  required  to  sub- 
mit an  annual  report  to  the  Secretary  of  the  Interior,  who  provided 
quarters  for  it,  and  passed  upon  its  accounts  and  the  appointment  of 
its  employes.  At  his  own  request  the  Secretary  was  relieved  of  these 
supervisory  powers. 


1 8  History  of  Domestic  and  Foreign  Commerce. 

The  rather  nominal  authority  which  the  Secretary  of  the  Interior 
possesses  over  the  Territories,  Alaska  and  Hawaii,  affords  him  an 
opportunity  to  exercise  an  influence  over  their  commerce.  His  author- 
ity consists  largely  in  the  receipt  of  reports  from  the  governors  and  in 
the  making  of  recommendations  for  legislation. 

THE  DEPARTMENT  OF  AGRICULTURE. 

The  Department  of  Agriculture  was  established  in  1889  as  the  natural 
outgrowth  of  the  agricultural  activities  of  the  Government,  which 
began  in  1836  with  the  distribution  of  seeds  and  plants  by  the  Com- 
missioner of  Patents,  and,  in  1862,  developed  into  a  so-called  "Depart- 
ment of  Agriculture,"  which  was  in  reality  a  detached  bureau  with  a 
commissioner  in  charge. 

Important  commercial  functions  are  exercised  by  one  of  its  subdivi- 
sions, the  Weather  Bureau,  which  was  established  in  1890.  Before 
that  year,  however,  a  part  of  the  work  now  done  by  this  bureau  was 
accomplished  by  other  agencies.  As  early  as  1863  the  Department  of 
Agriculture  published  meteorological  data  compiled  by  the  Smith- 
sonian Institution,  and  upon  the  recommendation  of  the  department's 
commissioner  regular  weather  reports  were  inaugurated  in  1870,  when 
the  Chief  Signal  Officer  of  the  Army  was  authorized  to  give  storm- 
warnings  and  to  take  meteorological  observations.  Since  the  organi- 
zation of  the  Weather  Bureau  its  duties  have  increased  until  they  have 
attained  a  surprising  variety,  and  its  operations  have  extended  into  all 
parts  of  the  world.  Concisely  stated,  the  activities  of  the  Weather 
Bureau  are  these:  It  forecasts  the  weather;  issues  and  displays  its 
forecasts,  together  with  storm,  cold-wave,  frost,  and  flood  warnings; 
gages  and  reports  the  height  of  water  in  rivers;  transmits  marine  intel- 
ligence over  its  telephone  and  telegraph  lines  and  otherwise;  reports 
actual  temperature  and  rainfall  conditions;  conducts  investigations  in 
climatology  and  evaporation  and  makes  and  distributes  meteorological 
observations.  The  weekly  forecasts  issued  at  Washington  for  the 
weather  for  a  week  in  advance  are  prepared  on  the  basis  of  regular 
cable  and  wireless  reports  from  all  over  the  northern  hemisphere. 
Warnings  of  approaching  storms  were,  in  1912,  received  from  vessels 
sailing  along  the  various  coasts,  and  from  eight  special  observing  sta- 
tions maintained  in  the  West  Indies  during  the  hurricane  season.  The 
bureau  has  arranged  with  the  various  wireless  services  for  disseminating 
broadcast  over  the  oceans  and  the  Gulf  both  forecast  messages  and 
storm-warnings.  Through  its  display  stations,  the  bureau  reaches 
every  port  and  harbor  of  any  considerable  importance  on  the  Great 
Lakes  and  the  seacoasts.  The  regular  stations  at  eight  strategic  points 
maintain  a  vessel-reporting  service,  whereby  information  regarding 
passing  vessels,  wrecks,  and  marine  disasters  is  promptly  communicated 
to  interested  parties.  The  weather  observers  at  all  marine  stations 


The  Machinery  of  Federal  Regulation  of  Commerce.          19 

report  vessels  in  distress  and  send  out  calls  for  help  which  bring  assist- 
ance. The  Bureau  publishes  frequent  meteorological  charts  of  the 
oceans  and  Great  Lakes.1 

THE  DEPARTMENT  OF  COMMERCE. 

After  a  statement  has  been  made  of  the  commercial  activities  of  the 
eight  departments  of  the  Federal  Government  first  established,  the 
question  might  be  asked,  what  important  functions  remain  to  be  sub- 
served by  a  Department  of  Commerce?  Congressman  Mann,  of 
Illinois,  speaking  for  the  House  Committee  on  Interstate  and  Foreign 
Commerce,  answered  the  question  in  the  course  of  the  debate  preceding 
the  establishment,  in  1903,  of  the  Department  of  Commerce  and  Labor. 
He  pointed  out  that,  following  the  creation  of  the  necessary  administra- 
tive departments  in  the  early  period  of  United  States  history,  Congress 
was  conservative  about  establishing  new  departments,  whose  heads 
would  be  entitled  to  seats  in  the  President's  Cabinet,  the  efficiency 
of  which  would  be  destroyed  if  its  size  were  unduly  increased.  Mr. 
Mann  said:2 

"It  is  evident  that  not  more  than  one  new  Department  of  the  Government 
is  likely  to  be  created  at  this  time  in  view  of  our  past  policy,  but  it  has  seemed 
to  your  committee  that  the  enormous  interests  in  our  country  not  engaged  in 
agriculture  but  now  engaged  in  trade  and  transportation,  in  manufacturing 
and  mechanical  pursuits,  might  well  have  gathered  together  into  one  new 
executive  department  of  the  Government  those  branches  of  the  public  service 
clearly  related  to  their  interests,  and  which  could  easily  be  detached  from  the 
Departments  in  which  they  now  are." 

Some  of  the  Departments  in  existence  prior  to  February  14,  1903, 
when  considerations  such  as  those  stated  above  resulted  in  the  passage 
of  the  act  establishing  the  Department  of  Commerce  and  Labor,  were 
then  much  more  concerned  with  the  development  and  regulation  of 
commerce  than  they  now  are.  Most  of  the  bureaus  and  services  now 
comprised  within  the  Department  of  Commerce  were  originally  estab- 
lished as  branches  of  the  older  Departments,  particularly  the  Treasury 
Department,  from  which  were  transferred,  in  1903,  the  Bureaus  of 
Navigation,  Statistics,  Standards,  and  Immigration,  the  Lighthouse 


bureaus  which  are  indirectly  concerned  with  commercial  regulation  are  the  Bureau  of 
Animal  Industry,  which  supervises  the  movement  of  animals,  meats  and  meat  food  products  in 
interstate  and  foreign  commerce,  exercises  important  quarantine  functions,  and  seeks  to  control 
and  eradicate  diseases  of  animals,  particularly  in  times  of  epidemic;  the  Bureau  of  Plant  Industry, 
which  has  on  occasions  made  investigations  into  the  best  methods  of  marketing,  transporting,  and 
storing  fruits;  the  Federal  Horticultural  Board,  which  administers  the  Federal  plant  quarantine 
act  of  1912,  having  to  do  with  the  entry  of  foreign  nursery  stock  and  other  plants  and  plant 
products,  and  the  establishment  and  maintenance  of  a  foreign  and  domestic  quarantine  on  account 
of  plant  diseases  and  insect  pests;  the  Office  of  Markets,  which  investigates  and  reports  on  the 
marketing  and  distribution  of  farm  products;  the  Bureau  of  Chemistry,  which  inspects  the  con- 
ditions of  manufacture,  transportation,  and  sale  of  food  and  drug  products,  and  makes  investiga- 
tions looking  to  improved  methods  of  transporting  food  products;  the  Bureau  of  Statistics,  which 
issues  crop  reports  which  are  of  great  value  to  business  men  in  prognosticating  conditions;  and 
the  Office  of  Public  Roads,  which  is  energetically  furthering  the  "good-roads  movement." 
*Cong.  Record,  XXXVI,  1903,  p.  1(H6. 


2O  History  of  Domestic  and  Foreign  Commerce. 

Board,  the  Lighthouse  Establishment,  the  Steamboat-Inspection 
Service,  the  United  States  Shipping  Commissioners,  and  the  Coast  and 
Geodetic  Survey.  From  the  Department  of  State  came  the  Bureau  of 
Foreign  Commerce,  and  from  the  Department  of  the  Interior,  the 
Census  Bureau.  The  U.  S.  Fish  Commission  and  the  so-called  Depart- 
ment of  Labor,  then  unattached  to  any  of  the  eight  executive  depart- 
ments, were  annexed,  and  two  new  bureaus  created,  those  of  manu- 
factures and  of  corporations.  As  its  title  and  make-up  indicate,  the 
departmental  functions  were  not  confined  to  commerce,  but  included 
labor  as  well,  but  ten  years  later  a  separate  Department  of  Labor  was 
established. 

The  oldest  of  the  institutions  over  which  the  Department  of  Com- 
merce has  supervision  is  the  Lighthouse  Service.1  Although  continuously 
in  the  Treasury  Department  until  1903,  this  service  has  many  times 
been  reorganized  and  placed  under  the  supervision  of  various  officers. 
By  the  act  of  August  7,  1789,  Congress  accepted  the  cession  of  the  eight 
lighthouses  then  maintained  by  the  States,  and  undertook  to  manage 
them  through  the  Secretary  of  the  Treasury.  His  functions  were 
assumed  by  the  newly  created  Commissioner  of  Revenue  from  1792 
until  1802,  when  the  office  was  abolished.  The  secretary  resumed 
control  until  1813,  when  the  commissioner's  office  was  reestablished, 
and  lighthouses  were  again  placed  within  his  jurisdiction.  When  for 
a  second  time  his  office  was  discontinued,  in  1820,  the  management  of 
the  service  was  delegated  to  the  Fifth  Auditor  of  the  Treasury,  who 
remained  in  control,  and  was  known  as  the  General  Superintendent  of 
Lights,  until  1852,  when  a  more  enduring  organization  was  effected-. 
The  Lighthouse  Board,  then  created,  consisted  of  the  Secretary  of  the 
Treasury,  three  naval  officers,  three  engineer  officers  of  the  Army,  and 
two  civilians,  eminent  in  science.  In  1903  the  Secretary  of  Commerce 
and  Labor  assumed  the  functions  exercised  before  by  the  Secretary  of 
the  Treasury.  The  final  act  of  reorganization  was  that  of  June  17, 
1910,  which  abolished  the  Lighthouse  Board  and  created  in  the  Depart- 
ment of  Commerce  and  Labor  a  Bureau  of  Lighthouses,  with  a  Com- 
missioner of  Lighthouses  in  charge.  The  duties  which  devolve  upon 
the  service  include  the  marking  and  lighting  of  the  channels  of  harbors 
and  navigable  rivers;  the  installation  and  maintenance  of  aids  to  naviga- 
tion; the  testing  of  apparatus  with  a  view  to  introducing  improvements; 
and  the  publication  of  information  concerning  aids  to  navigation  in  the 
Weekly  Notices  to  Mariners,  which  show  the  changes  in  lights,  buoys, 
etc.,  and  contain  current  information  necessary  for  safe  navigation. 

Another  institution,  almost  as  old  as  the  Government,  by  which 
commerce  is  facilitated  and  benefited,  is  the  Census.  The  first  census 
was  taken  in  1790,  when  the  returns  were  made  to  the  President. 
Beginning  with  1800,  the  Secretary  of  State  was  given  general  supervi- 

I0rganization  and  Law  of  the  Department  of  Commerce  and  Labor,  65-66. 


The  Machinery  of  Federal  Regulation  of  Commerce.          21 

sion,  which  he  retained  until  the  establishment,  in  1849,  of  the  Depart- 
ment of  the  Interior,  after  which  the  head  of  that  Department  exercised 
supervisory  functions  until  in  1903,  when  the  work  was  transferred  to 
the  new  Department  of  Commerce  and  Labor.  Previous  to  1902  the 
Census  Office  was  discontinued  at  the  expiration  of  the  work  of  taking 
each  decennial  census  and  then  reorganized  for  the  succeeding  census, 
but  in  that  year  it  was  transformed  into  a  permanent  and  continuous 
institution.  When  it  was  transferred  to  the  Department  of  Commerce 
and  Labor  in  1903,  the  designation  was  changed  to  "Bureau  of  the 
Census."  Until  1880  United  States  marshals  were  required  to  take 
the  census,  but  thereafter  special  supervisors  and  enumerators  were 
employed. 

The  Census  Bureau  is  now  no  longer  maintained  merely  for  the 
decennial  enumeration  of  the  population,  but  is  charged  with  the  com- 
pilation of  special  statistical  reports  on  a  variety  of  subjects.  A  census 
of  manufactures  is  taken  every  five  years,  and  the  act  providing  for 
the  census  of  1910  required  a  similar  census  of  agriculture.  Under 
the  act  of  1902,  moreover,  the  decennial  collection  of  statistics  is 
required  in  connection  with  transportation  by  water,  express  business, 
banking  and  loan  institutions,  the  fishing  industry,  and  in  other  fields. 
Quinquennially  the  bureau  compiles  statistics  relating  to  street  railways, 
telegraph  and  telephone  lines,  and  electric  light  and  power  stations,  and 
annually,  on  the  production  and  distribution  of  cotton  and  forest 
products.  These  statistical  reports  are  included  in  monographs  afford- 
ing valuable  economic  and  historical  information. 

The  Coast  and  Geodetic  Survey  was  the  first  technical  bureau  estab- 
lished by  the  Government.  In  1807  the  President  was  "authorized 
to  cause  a  survey  of  the  coast  of  the  United  States  to  be  made/'  The 
organization  of  the  work  was  delayed  by  the  war  of  1812,  and  operations 
did  not  begin  until  1816.  The  early  work  was  done  under  the  super- 
vision of  the  Treasury  Department,  where  the  Survey  remained  until 
1903,  with  the  exception  of  two  short  periods,  both  before  1836,  when 
it  was  temporarily  supervised  by  the  Secretary  of  the  Navy.  The  con- 
nection with  the  Navy  Department,  nevertheless,  was,  until  the  Spanish- 
American  war,  a  close  one.  For  fifty  years,  previous  to  1898,  nearly 
one-half  of  the  Survey  vessels  were  both  manned  and  officered  by  the 
Navy,  but  these  duties  have,  since  that  time,  been  performed  exclusively 
by  civilians.  The  present  organization  dates  from  1843,  and  the  name 
"Coast  and  Geodetic  Survey"  from  1878.  Previous  to  the  latter  year 
the  appellation  "Coast  Survey"  was  used.  The  Survey  is  charged  with 
the  survey  of  the  coasts  of  the  United  States  and  of  coasts  subject 
to  its  jurisdiction,  and  with  the  publication  of  charts  covering  these 
surveys.  Its  activities  are  not,  however,  confined  strictly  to  the 
coasts.  Rivers  are  surveyed  to  the  head  of  tidewater  or  ship  naviga- 
tion; deep-sea  soundings,  and  temperature  and  current  observations 


22  History  of  Domestic  and  Foreign  Commerce. 

are  taken  in  the  Gulf  Stream  and  Japan  Current,  as  well  as  along  the 
coasts;  magnetic  researches  and  observations  are  made  on  land  and 
sea;  heights  and  geographic  positions  are  ascertained;  and  latitude  and 
longitude  are  determined  and  triangulation  work  done  in  the  United 
States.  Publicity  is  given  to  the  results  of  these  observations  through 
a  variety  of  media,  including  some  of  especial  benefit  to  mariners,  such 
as  sailing  and  harbor  charts,  general  charts  of  the  coast,  Tide  Tables, 
and  Coast  Pilots  containing  sailing  directions.  The  Bureau  is,  with  the 
Bureau  of  Lighthouses,  a  joint  publisher  of  the  weekly  Notices  to 
Mariners. 

The  Bureau  of  Foreign  and  Domestic  Commerce  is  a  consolidation 
of  three  bureaus,  Statistics,  Foreign  Commerce,  and  Manufactures. 
Preceding  the  organization  in  the  Treasury  Department  of  the  Bureau 
of  Statistics  (by  the  act  of  July  28,  1866),  the  Department  had  been 
systematically  collecting  statistics  for  nearly  fifty  years,  under  the 
authorization  of  the  act  of  February  10,  1820.  Even  before  that  time 
the  Secretary  of  the  Treasury  had  been  called  upon  by  Congress  for 
statistical  reports  concerning  commerce.  The  information  was  secured 
by  the  collectors  of  customs,  and  compiled  and  published,  after  1820, 
by  a  Division  of  Commerce  and  Navigation,  which  was  consolidated 
with  the  Bureau  established  in  1866.  The  Bureau  of  Statistics  orig- 
inally published  data  relating  to  foreign  trade  alone;  but,  beginning 
in  1875,  it  was  required  to  publish  statistics  of  internal  commerce, 
other  than  by  railroad,  as  well.  Since  1892  it  has  been  required  to 
publish  statistics  of  imports  and  exports  moving  by  rail  as  well  as  by 
water.  A  Statistical  Office,  established  in  the  State  Department  in 
1842,  was  organized  in  1874  as  the  Bureau  of  Statistics.  In  1897  its 
name  was  changed  to  Bureau  of  Foreign  Commerce,  to  avoid  confusion 
with  other  governmental  statistical  bureaus.  Finally,  in  1903,  it  was 
merged  into  the  Bureau  of  Statistics  above  referred  to.  Its  principal 
duty  was  the  publication  of  consular  reports.  The  final  consolidation 
occurred  in  1912,  when  with  the  Bureau  of  Statistics  was  combined  the 
Bureau  of  Manufactures,  to  form  the  Bureau  of  Foreign  and  Domestic 
Commerce.  The  Bureau  of  Manufactures  wras  one  of  the  two  new 
bureaus  established  in  1903.  It  was  designed  "to  foster,  promote  and 
develop  the  various  manufacturing  industries  of  the  United  States,  and 
markets  for  the  same  at  home  and  abroad,  ...  by  gathering,  com- 
piling, publishing,  and  supplying  all  available  and  useful  information  con- 
cerning such  industries  and  such  markets,  and  by  such  other  methods 
and  means  as  may  be  prescribed  by  the  Secretary  or  provided  by  law." 

The  Bureau  of  Foreign  and  Domestic  Commerce  is  closely  related 
to  the  promotion  of  commerce.  To  that  end  it  issues  publications 
containing  a  large  amount  of  useful  information.  Daily  Consular  and 
Trade  Reports,  together  with  the  reports  of  the  commercial  agents  of 
the  Department,  contain  up-to-date  information  regarding  trade 


The  Machinery  of  Federal  Regulation  of  Commerce.          23 

conditions  in  foreign  countries,  opportunities  for  the  expansion  of  both 
foreign  and  domestic  trade,  and  information  as  to  the  service  rendered 
by  the  Government  for  the  promotion  of  commerce.  Special  bulletins 
relate  to  subjects  of  current  commercial  significance;  a  World  Trade 
Directory  shows  the  names  of  possible  foreign  buyers  of  American  prod- 
ucts; confidential  circulars  indicate  current  projects,  involving  pur- 
chases, which  are  of  interest  to  American  business  men;  the  "Tariff 
Series"  includes  bulletins  on  such  subjects  as  "Consular  Regulations 
of  Foreign  Countries,"  and  "Foreign  Tariff  Notes;"  and  a  monthly 
sailing-dates  bulletin  shows  the  sailings  from  the  principal  ports  of  the 
United  States  to  the  principal  ports  of  the  rest  of  the  world. 

The  publications  mentioned  are  those  which  are  not  specifically 
related  to  the  statistical  functions  of  the  bureau.  The  statistical  pub- 
lications are  necessarily  voluminous.  The  statistics  of  foreign  com- 
merce embrace  tables  showing  imports-  and  exports  by  articles,  coun- 
tries, and  customs  districts;  the  transit  trade;  the  warehousing  of 
imported  goods;  imports  entered  for  consumption;  ocean  freight  rates; 
and  the  movement  of  American  and  foreign  vessels  in  the  foreign 
trade.  These  statistics  are  collected  in  a  large  volume  published  annu- 
ally. The  Statistical  Abstract  of  Foreign  Countries,  an  annual  publica- 
tion, shows,  in  terms  of  American  currency,  weights,  and  measures,  the 
imports  into  and  exports  from  each  country  of  the  world.  The  Foreign 
Commerce  of  the  United  States,  a  monthly  statement  of  the  "total  values 
of  imports  and  exports,"  is  also  published.  This  publication,  formerly 
entitled  Monthly  Summary  of  Commerce  and  Finance,  has  in  the  past 
contained  monographs  upon  commercial  and  industrial  subjects,  and, 
until  1913,  it  presented  figures  concerning  internal  commerce,  i.  e.,  the 
quantities  of  certain  staple  commodities,  e.  g.,  live-stock,  grain,  produce, 
provisions,  merchandise,  lumber,  fruits,  coke,  coal,  and  petroleum, 
handled  at  various  principal  markets.  The  Bureau  also  publishes  The 
Statistical  Abstract  of  the  United  States,  a  condensation  of  miscellaneous 
statistical  information  collected  by  the  various  branches  of  the  Govern- 
ment. 

The  reason  for  the  publication  of  so  great  a  variety  of  statistics  was 
stated  by  Secretary  Nagle,  in  his  annual  report  for  1911  (p.  78),  as  follows: 

"Changes  in  the  character  of  the  imports  and  exports  have  materially 
affected  trade  currents,  the  share  of  our  exports  which  is  sent  to  Europe  having 
fallen  from  approximately  80  per  cent  a  quarter  of  a  century  ago  to  less  than 
64  per  cent  in  1911,  and  that  to  other  parts  of  the  world  proportionately 
increased.  These  changes  in  the  character  of  the  commerce  and  its  move- 
ments, as  well  as  the  increase  in  the  volume  of  both  imports  and  exports,  have 
stimulated  the  desire  on  the  part  of  the  public  for  commercial  information  in 
much  greater  detail  and  to  be  presented  with  much  greater  promptness." 

In  1905  four  commercial  agents  were  added  to  the  staff  of  the 
Bureau  of  Manufactures  and  sent  abroad  with  the  object  of  promoting 
the  foreign  commerce  of  the  United  States.  Manufacturers  and 


24  History  of  Domestic  and  Foreign  Commerce. 

merchants,  as  well  as  the  press,  have  expressed  their  appreciation  of  the 
services  rendered  by  these  agents  through  their  reports  on  conditions 
abroad.  Beginning  with  1912,  the  commercial  agents  were  also  assigned 
to  work  at  home,  looking  to  the  development  of  the  export  trade  through 
personal  contact  with  the  manufacturers  and  merchants  in  whose 
interest  they  have  carried  on  their  investigations  abroad.  The  num- 
ber of  men  engaged  in  this  work  has  been  increased  and  the  service 
extended.  In  order  that  this  service  may  supplement  rather  than 
duplicate  the  work  of  consular  officers,  the  men  employed  are  chiefly 
technical  experts,  familiar  with  the  conditions  existing  in  particular 
branches  of  trade. 

Another  new  departure  in  the  work  of  the  bureau  lies  in  the  coopera- 
tion which  is  now  undertaken  with  representative  trade  organizations 
through  conferences  with  their  officers,  through  the  use  of  their  mem- 
bership lists  for  the  dissemination  of  confidential  commercial  informa- 
tion, and  through  filing  with  them  plans  and  specifications  for  work 
which  their  members  would  be  qualified  to  undertake.  The  part 
played  by  the  Department  in  the  organization  of  the  new  Chamber  of 
Commerce  of  the  United  States,  established  in  1912,  was  a  recognition 
of  the  importance  of  the  trade  associations.  The  Bureau,  which  for  a 
year  had  been  collecting  information  regarding  American  commercial 
associations,  sent  broadcast  to  these  organizations  an  invitation  to 
attend  a  conference  called  by  the  President.  Some  700  delegates,  rep- 
resenting 400  commercial  associations  located  in  every  part  of  the 
United  States,  thereupon  cooperated  to  form  the  new  body  which  is 
to  coordinate  the  unrelated  efforts  of  commercial  organizations,  looking 
towards  trade  promotion. 

The  lack  of  as  general  a  utilization  of  the  facilities  provided  by  the 
Government  for  the  promotion  of  commerce  as  is  possible  has  been 
recognized  by  the  department,  which,  in  1911  and  1912,  through  the 
Bureau  of  Manufactures  and  its  successor,  the  Bureau  of  Foreign  and 
Domestic  Commerce,  published  pamphlets  entitled  "Promotion  of 
Commerce,"1  containing  outlines  of  the  services  maintained  by  the 
various  governmental  offices  and  bureaus.  While  the  data  thus  pre- 
sented were  little  more  than  an  index  to  the  activities  of  these  agencies, 
the  pamphlet  was  designed  to  be  of  assistance  to  manufacturers  and 
merchants,  to  whom  it  was  sent  with  the  advice  that  they  secure  addi- 
tional information  from  those  bureaus  and  offices  engaged  in  work  of 
particular  interest  to  them. 

The  work  of  the  Bureau  of  Standards  was  inaugurated  in  1830,  when 
the  Secretary  of  the  Treasury  was  authorized  to  examine  the  weights 
and  measures  used  in  the  various  custom-houses.  In  1836  the  Depart- 
ment was  ordered  to  furnish  the  States  with  copies  of  the  standards 
adopted.  Until  1901  the  Superintendent  of  the  Coast  and  Geodetic 

Miscellaneous  Series,  Nos.  6,  6A,  and  6B. 


The  Machinery  of  Federal  Regulation  of  Commerce.          25 

Survey,  then  in  the  Treasury  Department,  also  served  as  the  Superin- 
tendent of  the  Office  of  Construction  of  Standard  Weights  and  Meas- 
ures, a  designation  first  used  in  1882.  The  functions  of  the  office  were 
limited.  The  growing  demand  for  a  great  variety  of  standards  and  for 
certification  by  the  Government  as  to  the  accurateness  of  weights  and 
measures  led,  in  1901,  to  the  dissociation  of  the  old  office  from  the 
Treasury  Department  and  its  establishment  as  the  National  Bureau  of 
Standards.  The  independent  existence  of  the  bureau  was,  however, 
of  short  duration,  for  in  1903  it  was  attached  to  the  Department  of 
Commerce  and  Labor  and  its  name  changed  to  "Bureau  of  Standards." 
The  Bureau  is  the  custodian  of  standard  weights  and  measures  which 
under  the  Constitution  are  fixed  by  the  Federal  Government.  It 
constructs  standards,  together  with  their  multiplies  and  subdivisions, 
and  compares  the  standards  used  in  commerce,  manufacturing,  engi- 
neering, scientific  investigations,  and  educational  institutions  with 
those  adopted  or  recognized  by  the  Government.  The  uniformity  and 
precision  in  weights  and  measures,  which  the  makers  of  the  Constitu- 
tion desired  to  insure,  is  secured  by  furnishing  to  official  sealers,  acting 
under  governmental  authority,  and  to  private  parties,  accurate  stan- 
dards of  length,  mass,  and  capacity. 

Congress  first  provided  for  a  Steamboat  Inspection  Service  by  the 
act  of  July  7,  1838,  thirty-one  years  after  Robert  Fulton,  by  running 
the  Clermont  from  New  York  to  Albany,  demonstrated  that  the  use  of 
steam  power  in  the  propelling  of  ships  was  practicable.  The  enactment 
of  the  law  was  coincident  with  the  initial  trip  of  the  Great  Western, 
the  first  steamship  built  for  the  trans-Atlantic  service.  Under  this 
law,  Federal  district  judges  appointed  inspectors  of  hulls  and  boilers 
in  their  respective  districts,  but  the  supervision  of  the  service  was 
vested  in  the  Secretary  of  the  Treasury.  The  method  of  appointing 
inspectors  was  changed  and  added  powers  were  given  to  the  service 
from  time  to  time.  In  1852  the  President  was  charged  with  the  duty 
of  appointing  supervising  inspectors;  in  1871  a  Supervising  Inspector 
General,  who  is  still  in  charge  of  the  service,  was  authorized;  and  finally, 
in  1903,  the  Secretary  of  Commerce  andj  Labor  took  the  general  juris- 
diction out  of  the  hands  of  the  Secretary  of  the  Treasury.  The  service 
is  charged  with  the  inspection  of  all  vessels  engaged  as  common  carriers 
in  interstate  commerce,  the  licensing  of  the  officers  thereof,  and  the 
administration  of  the  laws  relating  to  such  vessels  and  their  officers  and 
crews  for  the  protection  of  life  and  property.  It  formulates  such  rules 
governing  the  building  and  operation  of  ships  as  public  safety  requires, 
inspects  the  materials  used  in  steamship  boilers,  tests  the  boilers 
before  they  are  placed  in  service,  and  determines  the  passenger-carrying 
capacity.  It  examines  and  licenses  masters,  chief  mates,  other  mates  in 
charge  of  a  watch,  pilots  and  engineers  of  steamships,  and  masters  and 
chief  mates  of  sailing-vessels  of  over  700  tons.  These  licenses  it  is 
empowered  to  revoke,  in  cases  of  incompetence,  misbehavior,  or  negli- 


26  History  of  Domestic  and  Foreign  Commerce. 

gence.  An  annual  inspection  is  made  of  the  hulls,  appliances,  boilers, 
and  machinery  of  all  steam,  gas,  and  motor  vessels,  to  determine  their 
stability,  accommodations,  and  safety,  including  the  provision  of  fire 
apparatus,  life  preservers,  and  life  boats.  Sailing-vessels  over  700 
tons  and  other  vessels  and  barges  of  over  100  tons  are  also  inspected 
annually  with  reference  to  the  stability  -of  their  construction.  Neces- 
sary repairs  may  be  required  to  be  made. 

The  regulations  which  the  service  makes  as  to  the  operation  of  vessels 
upon  navigable  waters  relate  to  such  subjects  as  the  passing  of  ships, 
the  transportation  of  gunpowder,  the  carriage  on  non-passenger  vessels 
of  persons  not  belonging  to  the  crew,  and  the  issuance  of  special  permits 
for  excursions.  The  laws  for  the  protection  of  life  and  property  aboard 
vessels,  the  enforcement  of  which  is  committed  to  the  service,  are  of 
varied  nature  and  considerable  volume.  They  relate,  among  other 
things,  to  non-transportable  goods,  maltreatment  of  crews,  commission 
of  crimes  aboard  ship,  and  installation  of  fire-fighting  and  life-saving 
appliances. 

The  bureau  in  the  Department  of  Commerce  which  is  perhaps  most 
vitally  concerned  with  maritime  commerce  is  that  of  Navigation,  which 
is  entirely  distinct  from  the  bureau  of  the  same  name  in  the  Navy 
Department.  Its  varied  duties  were,  at  the  time  of  its  establishment 
under  the  Secretary  of  the  Treasury  in  1884,  performed  by  a  number  of 
agencies  in  his  Department  and  by  the  circuit  courts.  Various  func- 
tions have  since  been  added,  and  the  bureau,  which  is  one  of  those  trans- 
ferred to  the  Department  of  Commerce  and  Labor  in  1903,  is  now 
charged  with  the  enforcement  of  the  great  volume  of  Federal  naviga- 
tion laws,  covering  a  wide  range  of  subjects,  and  with  the  recommenda- 
tion of  changes  in  those  laws.  The  bureau  has  over  the  commercial 
marine,  including  the  merchant  seamen  of  the  United  States,  a  super- 
vision which  is  limited  only  by  the  grant  of  specific  authority  in  certain 
respects  to  other  governmental  agencies.  It  "registers"  American 
vessels  engaged  in  the  foreign  trade,  "enrolls"  those  engaged  in  the 
inland  and  coastwise  trade,  and  "licenses"  those  of  the  latter  which  are 
of  less  than  20  tons  measurement.  It  supervises  the  laws  relating  to 
the  admeasurement  of  vessels,  their  original  letters  and  official  numbers, 
publishes  annually  a  list  of  the  vessels  of  the  United  States,  and  collects 
statistics  of  the  merchant  marine  and  ship-building  industry.  The 
commissioner  examines  the  accounts  of  port  collectors,  surveyors  of 
customs,  and  shipping  commissioners,  with  respect  to  such  matters  as 
fines,  penalties,  and  forfeitures  required  under  the  navigation  laws, 
services  to  vessels,  navigation  fees,  amounts  collected  on  account  of 
decease  of  passengers,  tonnage-tax  collections,  and  shipment  and 
discharge  of  seamen. 

The  bureau  relies  for  the  fulfillment  of  its  varied  functions  upon  the 
cooperation  of  other  agencies.  The  enforcement  of  the  navigation 
laws,  for  instance,  has  from  the  time  of  its  establishment  been  intrusted 


The  Machinery  of  Federal  Regulation  of  Commerce.          27 

chiefly  to  customs  officers,  who  previously  had  jurisdiction  in  the 
matter.  Those  functions  which  relate  to  the  protection  of  seamen  are 
administered  by  shipping  commissioners  who  were  first  appointed 
in  1872,  and  are  stationed  at  important  ports  of  entry  on  the  seaboard. 
At  points  where  there  is  no  shipping  commissioner  the  collector  of  the 
port  performs  the  functions  elsewhere  assigned  to  the  commissioners, 
including  the  registration  of  men  seeking  employment  as  seamen,  the 
superintendence  of  their  engagement  and  discharge,  the  rendition  of 
aid  to  masters  in  compelling  seamen  to  be  aboard  ships  at  the  agreed 
time,  and  the  facilitation  of  apprenticeships.  The  wide  scope  of  the 
bureau's  operations  makes  its  commissioner  an  authority  on  maritime 
subjects.  His  annual  reports  contain  not  only  valuable  statistical 
data  concerning  the  American  merchant  marine,  but  information  in 
relation  to  registry  laws,  regulation  of  radiotelegraphy,  ship  subsidies, 
safety  of  life  and  property  at  sea,  and  other  current  questions  of  mari- 
time policy. 

The  Bureau  of  Corporations  was  established  in  1903,  by  the  act  which 
created  the  Department  of  Commerce  and  Labor,  to  perform  duties  of 
an  investigative  and  informational  character.  Its  powers  of  inquiry 
and  publicity  constituted  an  important  part  of  the  regulative  machinery 
provided  for  corporations  by  the  Federal  Government.  On  the  basis 
of  its  investigations  into  the  organization,  conduct,  and  management 
of  joint  stock  companies  and  corporate  combinations,  including  those 
engaged  in  interstate  and  foreign  commerce,  the  President  was  enabled 
to  make  recommendations  to  Congress  for  legislation  to  regulate 
commerce.  The  Bureau  of  Corporations,  as  stated  below,  was,  in 
1914,  merged  into  the  Federal  Trade  Commission. 

THE  DEPARTMENT  OF  LABOR. 

The  only  bureau  of  the  new  Department  of  Labor,  established  in 
1913,  which  is  closely  associated  with  commercial  matters  is  that 
dealing  with  immigration.  In  1891  the  office  of  the  Superintendent 
of  Immigration  was  established  in  the  Treasury  Department,  and  there- 
after the  National  Government  undertook  the  direct  supervision  of 
immigration  matters.  These  had  theretofore  been  left  to  State  officials, 
who,  after  1882,  acted  under  the  direction  of  the  Secretary  of  the 
Treasury.  The  Bureau  of  Immigration,  with  a  commissioner  general 
in  charge,  was  established  in  1895,  transferred  to  the  Department  of 
Commerce  and  Labor  in  1903,  and  to  the  Department  of  Labor  in  1913. 
From  1907  to  1913  it  was  known  as  the  Bureau  of  Immigration  and 
Naturalization,  but  two  separate  bureaus  in  the  Department  of  Labor 
now  deal  with  these  questions.  The  immigration  and  Chinese  exclu- 
sion laws  are  administered  by  the  Bureau  of  Immigration,  which  main- 
tains a  rigid  surveillance  over  all  arriving  steamships;  as  well  as  over 
emigrants  departing  from  important  European  ports,  destined  to  the 
United  States. 


28  History  of  Domestic  and  Foreign  Commerce. 

INDEPENDENT  GOVERNMENTAL  AND  INTERNATIONAL  AGENCIES. 

Of  the  agencies  of  government,  unaffiliated  with  any  of  the  executive 
departments,  that  having  the  greatest  power  to  regulate  commerce  is 
the  Interstate  Commerce  Commission,  a  body  which,  since  its  estab- 
lishment in  1887,  has  become  a  powerful  regulative  agency,  exercising 
a  great  influence  over  interstate  transportation.  Although  designated 
as  a  "commerce"  commission,  its  functions  relate  more  specifically  to 
matters  of  transportation.  By  virtue  of  its  control  over  railroads  and 
an  increasing  authority  over  water  carriers,  the  commission  has  been 
able  to  regulate  rates,  eliminate  special  favors,  and  establish  more  con- 
venient and  safer  service,  thereby  greatly  facilitating  the  development 
of  commerce.1 

In  1914,  Congress  created  a  Federal  Trade  Commission  which  took 
the  place  of  the  Bureau  of  Corporations.  The  Federal  Trade  Com- 
mission has  much  larger  powers  than  the  Bureau  of  Corporations 
possessed.  It  is  an  investigating  and  supervisory  body  created  pri- 
marily for  the  purpose  of  maintaining  fair  competition  among  corpora- 
tions engaged  in  interstate  trade.  Congress  gave  the  Commission, 
which  is  a  body  of  five  men,  large  powers  of  investigation  and  minor 
powers  of  regulation.  The  creation  of  the  Commission  was  intended 
to  be  a  step  towards  the  ultimate  goal  of 'Federal  regulation  of  corpora- 
tions engaged  in  interstate  commerce. 

Aid,  regulation,  and  protection  are  extended  to  commerce  by  the 
Federal  Government,  not  only  through  national  agencies,  but  also 
through  international  bureaus,  commissions,  and  congresses.  Of  these, 
the  Pan-American  Union  has  been  the  most  active  in  fostering  com- 
merce. In  1 88 1  James  G.  Blaine,  when  Secretary  of  State,  suggested 
the  convocation  of  a  Pan-American  conference,  which  was  held  in 
Washington  in  1889-90.  This  conference  established  the  International 
Bureau  of  American  Republics,  known  since  the  fourth  conference,  held 
in  1910,  as  the  Pan-American  Union.  While  the  union  performs  many 
duties,  largely  of  an  informational  character,  its  great  aim  is  to  develop 
and  maintain  closer  relations  of  commerce  and  friendship  between  the 
21  member  republics  of  the  western  hemisphere.  Its  publications, 
including  a  monthly  magazine,  special  reports,  and  hand-books,  relate 
particularly  to  commercial  questions.  An  extensive  correspondence 
looking  to  the  promotion  of  trade  is  carried  on,  not  only  with  the 
governments  of  the  member  countries,  but  with  manufacturers,  mer- 
chants, and  others.2 

:The  commission  is  discussed  in  vol.  I,  chap.  xvii. 

2Other  international  unions  concerned  with  commerce,  of  which  the  United  States  is  a  member, 
are:  The  Universal  Postal  Union,  International  Radiotelegraphic  Union,' International  Railway 
Congress,  Permanent  International  Association  of  Navigation  Congresses,  Union  for  the  Protec- 
tion of  Industrial  Property,  Metric  Union,  International  Union  for  the  Publication  of  Customs 
Tariffs,  and  International  Office  of  Public  Health.  These  are  discussed  in  Reinsch,  Public  Inter- 
national Unions,  etc. 


The  Machinery  of  Federal  Regulation  of  Commerce.          29 

THE  JUDICIARY  AND  LEGISLATIVE  AGENCIES. 

The  agencies  thus  far  considered  in  discussing  government  aid  and 
regulation  of  commerce  were  those  within  the  executive  branch  of  the 
Government.  A  survey  of  the  Federal  Judicial  system  indicates  that 
there  have  been  two  courts  established  for  the  handling  of  commercial 
matters — the  United  States  Court  nf  Customs  Appeals  and  the  United 
States  Commerce  Court,  both  of  recent  creation. 

The  Court  of  Customs  Appeals  was  created  August  5,  1909,  to  hear 
all  appeals  from  the  decision  of  any  board  of  United  States  General 
Appraisers  in  customs  cases,  relating  to  the  classification  of  merchan- 
dise, the  rate  of  duty  assessed,  fees  and  charges  connected  therewith, 
and  any  other  appealable  questions  as  to  the  laws  and  regulations 
governing  the  collection  of  the  customs  revenues. 

The  Commerce  Court,  in  existence  from  1910  to  1913,  was  designed 
to  effect  a  speedy,  uniform,  and  systematic  enforcement  of  the  inter- 
state commerce  law.  Congress  established  the  court  upon  the  recom- 
mendation of  President  Taft,  for  the  purpose  of  creating  a  tribunal 
which  should  eventually  be  a  body  of  experts  qualified  to  undertake 
the  consideration  of  technical  questions  in  a  special  field.  The  court, 
for  reasons  stated  in  Volume  I,  Chapter  XVII,  was  disestablished  after 
an  existence  of  only  three  years. 

The  consideration  of  the  legislative  machinery  of  the  Federal  Govern- 
ment which  deals  with  commerce  has  been  left  until  the  last,  because, 
despite  its  importance,  it  is  a  changing  mechanism  and  one  which  has 
little  actual  contact  with  commerce.  Through  its  instrumentality 
are  drafted  the  laws  which  are  administered  by  the  agencies  which 
have  already  been  considered.  Although  the  legislative  body  is  the 
creative  body,  and  not  the  one  which  performs  the  specific  acts  of 
"aid  and  regulation"  which  have  been  considered  in  this  chapter, 
its  powers  to  aid  and  regulate  commerce  are  none  the  less  important. 
These  powers  are  exercised  largely  through  committees  and  com- 
missions. 

When  the  National  Government  came  into  existence,  the  general 
practice  was  to  create  select  committees  to  handle  subjects  as  they 
arose,  and  after  the  completion  of  the  work  so  delegated,  the  committees 
ceased  to  exist.  Some  idea  of  the  difficulties  involved  in  this  method 
of  procedure  may  be  gleaned  from  the  fact  that  in  the  Third  Congress, 
for  instance,  there  were  at  least  350  select  committees.  Gradually 
the  practice  grew  of  creating  standing  committees,  to  whom  were 
referred  bills  relating  to  the  general  subjects,  over  which  they  were 
given  jurisdiction.  This  process  has  continued,  until  there  are  a  large 
number  of  standing  and  a  very  few  select  committees  at  each  session. 
The  committee  chambers  are  not  only  the  laboratories  where  the  legis- 
lative work  of  Congress  is  in  large  measure  done;  they  also  furnish  the 
means  whereby  public  opinion  may  most  effectively  be  brought  to  bear 


jo  History  of  Domestic  and  Foreign  Commerce. 

upon  proposed  measures,  and  the  hearings  which  the  committees  hold  do 
much  to  inform  the  public  of  the  issues  at  stake  in  important  national 
affairs  upon  which  legislation  is  pending.  In  the  period  from  1902 
to  1909,  the  House  Committee  on  Interstate  and  Foreign  Commerce 
alone  issued  89  publications,  including  reports  of  public  and  private 
hearings,  special  investigations,  etc.,  dealing  with  important  commer- 
cial questions. 

Of  the  Senate  committees,  those  particularly  concerned  with  com- 
merce are  the  following:  Commerce;  Expenses  in  the  Department  of 
Commerce;  Foreign  Relations;  Immigration;  Inter-Oceanic  Canals; 
Interstate  Commerce;  Public  Health  and  National  Quarantine;  Rail- 
roads; Standards,  Weights,  and  Measures;  Transportation  Routes  to  the 
Seaboard;  Transportation  and  Sale  of  Meat  Products.  House  com- 
mittees similarly  concerned  are:  Alcoholic  Liquor  Traffic;  Expenditures 
in  the  Department  of  Commerce;  Foreign  Affairs;  Immigration  and 
Naturalization;  Interstate  and  Foreign  Commerce;  Merchant  Marine 
and  Fisheries;  Railways  and  Canals;  Rivers  and  Harbors. 

The  Government  of  the  United  States  has  gradually  built  up  many 
agencies  for  the  regulation  of  commerce.  Each  of  the  three  great  branches 
of  the  Federal  Government,  but  the  executive  branch  in  particular,  is 
concerned  with  the  regulation  of  trade.  These  governmental  agencies 
have  varied  activities,  many  of  which  are  of  great  importance.  The 
United  States  Government,  however,  is  the  patron  rather  than  the 
autocrat  of  commerce,  its  policy  being  to  maintain  commercial  freedom 
by  means  of  such  restrictions  as  are  demanded  by  the  public  for  its 
own  protection. 


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